New England Research & Management Inc

5. Fees and Compensation
NERM is compensated with a quarterly fee, payable in advance, which is calculated based on a
percentage of the market value of the assets under management on the last business day of the
previous quarter. The fee schedule is clearly laid out in the investment advisory agreement,
which is signed between all clients and NERM (Marguerite Collins). All clients are given a copy
of the executed investment advisory agreement for their records. The quarterly schedule is
following:

                        Account Value                    Quarterly Fee

                         First $500,000                     0.300%

                     $500,00 - $1,000,000                   0.250%

                    $1,000,000 - $5,000,000                 0.200%

                   $5,000,000 - $10,000,000                 0.150%

                      Above $10,000,000                     0.100%

Fees are not now negotiable.

Fees may be allocated among family accounts, on a reasonable basis, as the clients may prefer.
For example, a client may request to have the fee for an IRA account billed directly to the
client’s taxable account.

Fees are deducted from client accounts quarterly, although upon request, bills may be sent
directly to clients for outside payment.

In addition to the advisory fees paid to NERM, clients may also incur certain charges imposed by
unaffiliated third parties such as broker-dealers, custodians, trust companies, banks and other
financial institutions and Service providers (collectively, “Financial Institutions”). These
additional charges may include brokerage commissions, transaction fees, custodial fees,
reporting service fees, reporting fees, tax overlay fees, fees attributable to alternative assets,
margin or other borrowing costs, charges imposed directly by a mutual fund or ETF in a client’s
account, as disclosed in the fund’s prospectus (e.g., fund management fees and other fund
expenses), deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and
electronic fund fees and other fees and taxes on brokerage accounts and securities transactions.
These fees are disclosed to clients directly by the financial institutions.

NERM does not receive any portion of the above fees and has no financial incentive to invest
client funds in any product, style, or method.

NERM’s standard fee schedule applies equally to all assets under management, including mutual
funds, although the firm does not charge fees on accounts too small to justify the administrative
burden of billing (generally accounts <$50,000.00).

The fees are billed in advance as described above.

Fees are refundable upon termination of the Investment Advisory Agreement. A pro-rated
portion of the fees, based upon the number of days remaining in the calendar quarter based upon
the effective date of termination, will be returned to the client by the firm. The agreement may
be termination by either the firm or the client, by written notice delivered to the other at any
time. The Investment Advisory Agreement may be terminated by the client without penalty
within five business days after initially entering into the relationship.

None of our supervised persons accept compensation for the sale of securities or other
investment products.

In addition to asset-based charges for advisory accounts as described above, New England
Research & Management offers Clients with taxable accounts an Income Tax Summary to assist
Clients in the filing of their tax returns. The fee for this optional service is $300 per year.

7. Types of Clients

New England Research & Management generally offers investment services to high net worth
individuals and families via managing their revocable and irrevocable trusts, retirement and
pension accounts, custodian accounts, foundations, and estates on a discretionary basis.

As a condition for starting and maintaining an advisory relationship with NERM, it is generally
required that Clients have a minimum investment amount of $500,000.00. At NERM’s sole
discretion, the firm may accept accounts with lower market values in certain circumstances, i.e.
related accounts, high funding levels, or indicated low levels of administration.